Punjab cabinet approves Ludhiana Metro project

Written by fe Bureau | Chandigarh | Updated: Jun 23 2011, 07:14am hrs
After lying in limbo for years, the much publicised Metro Rail Project for Ludhiana got the Punjab cabinet nod on Wednesday.

The state cabinet approved detailed project report (DPR) for the Ludhiana Metro Rail Project and a go-ahead has been given for its execution in the public private partnership (PPP) or build operate transfer (BOT) model.

State industry minister Tikshan Sood told FE at Punjab Bhawan on Wednesday that the Ludhiana Metro Rail Project would be executed at a cost of about R8,700 crore and it would prove to be the lifeline for the industrial hub of Punjab.

Sood told FE that a proposal would now be sent to the Centre and work on the prestigious project may start in next six months. The cabinet debated on three models-that suggested exclusive government funding, the one on PPP basis and the one BOT basis. He said that part of the metro track would be underground and part on elevated track.

The cabinet decision comes after the state proposed to the Centre for viability gap funding for the R8,000 crore plus project for states burgeoning industrial town. It had asked for VGF scheme that provides financial support in the form of grants, one time or deferred, to infrastructure projects undertaken through public-private partnerships with a view to make them commercially viable. The Union government has established a VGF to aid infrastructure projects which face the viability gap due to inherent nature of projects. The scheme administered by the finance ministry comes in aid of projects under PPP mode.

A top official in Punjab chief ministers office told FE that the Punjab chief minister has sent a demi official (DO) letter to Union finance minister requesting him to treat Ludhiana city as the special case to fund viability gap on the pattern of Delhi Metro.

The DO letter says that Ludhiana, the Manchester of India has more than 27,000 medium and small-scale industries, was providing employment to migrant people who commute intra-city and to adjoining industrial towns like Mandi Gobindgarh and Khanna. It was only in national interest that the Centre has to adopts this project.